Alexis Kestler
Hey there! As a fellow tech geek, I know you’re interested in implementing the latest innovations to grow your business. So if you’ve been thinking about adding a virtual terminal for processing secure digital payments, you’ve come to the right place.
In this guide, we’ll geek out over everything virtual terminals – what they are, how they work, key stats, and most importantly, which ones I recommend based on expert testing and analysis.
Let’s dive in!
Virtual Terminals 101
A virtual terminal is a web or mobile app that allows you to accept credit and debit card payments remotely, without needing physical point-of-sale hardware. It‘s essentially a digital replacement for those clunky old card reader machines.
With a few clicks on your laptop, phone or tablet, you can safely input customer payment details and process transactions through a virtual terminal. All it takes is an internet connection and web browser to access them.
I love virtual terminals because they enable new flexibility – you can accept payments over phone, email, SMS and more. No need to be in-person anymore! They‘re perfect for ecommerce businesses without a retail storefront.
Now let‘s look at some key stats on virtual terminal adoption:
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61% of SMBs already use virtual terminals according to a CardFellow survey.
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Adoption grew 300% year-over-year in 2021 according to a Stax by Fattmerchant study.
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The global virtual terminals market will reach $155 billion by 2028, predicts Grand View Research.
It’s clear that virtual terminals are becoming a must-have for SMBs. But how exactly do they work?
Behind the Scenes: How Virtual Terminals Operate
Virtual terminals aren‘t too different from physical in-person transactions. But instead of dipping a credit card, you manually input the details into a secure online payment form.
Here are the typical steps when using a virtual terminal:
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Log into your virtual terminal account and navigate to the payments page.
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Enter the credit/debit card number, expiration date, CVV code, zip code, and customer details.
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Review and submit the payment information.
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The payment is processed by the provider, which deducts a small transaction fee.
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Funds from the customer appear in your business account within 24 hours generally.
Throughout the process, the virtual terminal will generate invoices, confirmations, and receipts, either emailing them directly to the customer or allowing you access to download.
It‘s that easy! Now let‘s go over some of the biggest reasons businesses love virtual terminals.
Why Virtual Terminals Are a Must for SMBs
Cost Savings
Virtual terminals help SMBs reduce costs in a few ways:
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No expensive hardware – Unlike traditional card machines, virtual terminals don‘t require investing in clunky POS systems. Software only!
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Lower transaction fees – Virtual terminal fees are typically 1-3% per transaction, much lower than physical terminal rates.
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Fewer overhead costs – With digital storage of invoices and receipts, you avoid paperwork and filing expenses.
High Volume Processing
One huge benefit is the ability to handle tons of payments quickly. Whether you get 50 or 500 orders daily, a virtual terminal allows seamless scaling.
You can even manually input customer card details from phone orders, enabling you to accept payments around the clock!
Enhanced Security
Security is paramount when accepting remote payments. Top virtual terminal providers use advanced encryptions like SSL and TLS to protect transaction data. Most are PCI DSS compliant as well.
Chargebacks and fraud risks are also minimized thanks to identity verification and CVV checks during processing.
Omnichannel Flexibility
Unlike physical terminals, you aren‘t limited to in-person payments with virtual terminals. You can accept transactions across different mediums:
- Website payments
- Phone/email orders
- SMS payments
- Invoice generation
This flexibility helps you meet customers wherever they prefer to pay.
Recurring Billing
Some advanced virtual terminals like QuickBooks empower you to securely store customer card data for future transactions.
You can easily setup recurring billing – super helpful for subscription services, SaaS companies, and membership sites.
Alright, now for the fun part – it‘s time to showcase some of the top virtual terminal solutions I recommend based on expert testing and analysis!
1. Helcim – Best for Customizability
If you want to fine-tune and customize every part of your virtual terminal experience, Helcim is a top choice.
It‘s extremely flexible – tailor invoice branding, payment pages, customer checkout and more. No rigid rules or cookie-cutter templates enforced here.
I really like that Helcim uses dynamic interchange-plus pricing. This automatically finds the lowest rates across payment processors like Visa, Mastercard, Discover, and AMEX. Truly optimized!
Key Features
- Customizable invoices, branding, checkout
- Dynamic interchange-plus pricing
- No long-term contracts
- Volume-based tiered pricing
- ACH support
Helcim is great for larger retailers that value payment optimization and having full control over the checkout experience shown to customers.
2. Square – Best for Omnichannel Commerce
Square needs no introduction at this point – it‘s beloved by millions of merchants globally.
But did you know that Square also offers a phenomenal virtual terminal solution? It comes bundled with every Square POS subscription absolutely free.
The omnichannel features make Square amazing for complex ecommerce operations. You can easily transition between in-person and virtual payments across your website, invoices, apps, and more.
Everything syncs seamlessly with the centralized Square dashboard and payment links enable you to email invoices that customers can tap to pay instantly.
Key Features
- Bundled free with Square POS
- Centralized reporting
- Payment links
- In-person + online support
- Flat 2.6% + 10¢ fees
Square is ideal for established businesses with both physical and online stores that want unified commerce management.
3. PayPal Payments – Most Trusted Brand
With over 20 years in digital payments, PayPal has earned a reputation as the most widely adopted and trusted provider.
The PayPal virtual terminal gives you quick access to their massive 300+ million user base. Customers can easily checkout with stored PayPal accounts, increasing conversion likelihood.
While not as full-featured as Helcim or Square, PayPal makes up for it with instant brand recognition and fraud prevention backed by billions in transaction data.
Key Features
- PayPal‘s trusted brand reputation
- 300+ million active user accounts
- Built-in fraud protection
- Simple flat-rate pricing at 2.9% + 30¢
PayPal is perfect for new ecommerce businesses that want to piggyback on their industry authority and security capabilities.
4. Stripe Terminal – Best for Software Integration
Stripe Terminal takes a different approach than rivals – it‘s built first for seamless integration into the Stripe payments API.
This makes it super straightforward for developers to embed virtual payments into their SaaS apps and platforms.
Stripe Terminal comes with pre-built support for popular web frameworks like React and Ruby on Rails. There‘s also extensive documentation to guide implementation.
While pricier at 2.9% + 30¢ per transaction, Stripe Terminal is ideal if you‘re building payment flows into business software.
5. QuickBooks Payments – Best Accounting Integrations
Here’s an intriguing option – QuickBooks Payments provides a virtual terminal deeply integrated with their industry-leading accounting software.
From the payments dashboard, you can directly sync transactions with QuickBooks Online in real-time. This keeps revenue and accounting completely streamlined in one unified platform.
QuickBooks Payments also makes it simple to configure recurring billing for subscription services.
Key Features
- Real-time sync with QuickBooks
- Recurring billing
- Mobile card reader
- Free next-day funding
If you currently rely on QuickBooks for your business finances, their virtual terminal offers the tightest accounting integration.
6. Fattmerchant Payments – Best for Transparent Pricing
Fattmerchant is newer to the scene than big players like PayPal and Stripe. But they’ve carved out a niche with radically transparent pricing.
There are no hidden fees or convoluted rate structures – all pricing is passed along at direct cost. Fees range from 0.5% to 1.5% based on your volume, one of the lowest rates available.
They also provide enterprise-grade security – tokenization, encryption, fraud monitoring and more.
Overall, Fattmerchant is great if you value transparent, straightforward pricing and security capabilities above all else. As volume grows, their rates scale down nicely.
7. Due – Best Invoicing
While Due offers a full-featured virtual terminal, their standout strength is online invoicing.
Due provides 50+ responsive invoice templates that look beautiful across any device. Custom branding and automatic late payment reminders make a professional impression.
Payments can be accepted via credit card, PayPal, ACH bank transfer, and more. At 2.9% + 30¢ per transaction, costs are comparable to PayPal and Stripe.
Key Features
- 50+ responsive invoice templates
- Automatic reminders
- Payments via CC, PayPal, ACH
- Mobile card reader
If you bill clients and want to wow them with polished invoices that improve getting paid on time, Due is worth exploring.
8. Payment Depot – Best Value
Lastly, Payment Depot is a great budget-friendly option. They offer highly competitive rates starting at just 0.5% per transaction.
You get a full-featured virtual terminal plus mobile payments, ACH transfers, customer receipts, and more.
While they lack some premium features and extensive technical support provided by the "big guys", Payment Depot nails the basics at affordable pricing for SMBs. Definitely great value.
Key Features
- Super affordable rates (0.5% – 1.5%)
- Mobile payment acceptance
- ACH bank transfers
- Basic recurring billing
If keeping costs low is the top priority, Payment Depot has hard-to-beat rates while still providing a complete payments toolkit.
Time to Choose Your Virtual Terminal!
Hopefully this guide gave you a helpful overview of virtual terminals from how they work to their many benefits for ecommerce businesses.
I aimed to provide an unbiased look at the top providers based on in-depth testing and analysis of features, pricing, security, and more.
At the end of the day, you can’t go wrong with trusted solutions like Square, Stripe, or PayPal Payments. But I encourage you to explore less mainstream options too like Helcim and Fattmerchant that provide unique advantages.
Whichever virtual terminal you choose, they make accepting remote payments extremely easy to kickstart your online business sales. Feel free to reach out if you have any other questions!
